8. Reliance Industries Ltd. has an investment budget of `10 lakh for the current year. It has...
Question:
8. Reliance Industries Ltd. has an investment budget of `10 lakh for the current year. It has short listed two projects X and Y. Further particulars regarding them are given below:
Projects X(`) Y(`)
Initial Investment required 10,00,000 9,00,000 Av. Estimated CBDT 2,40,000 2,05,000 Salvage value is estimated to be nil for both the projects after the estimated life of 10 years. The company follows SLM of charging depreciation and tax rate is 35%. Assume cost of capital of 12%, find out:
(i) NPV
(ii) IRR Given PV of annuity of `1 for ten years at different rates:
Rate (%) 10 11 12 13 14 15 Annuity 6.1446 5.8992 5.6502 5.4262 5.2161 5.0188
Step by Step Answer:
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana